4.There would also be a discriminatory effect at the Community level. The objective of the Treaty is to establish and maintain a single market. In the light of that objective undertakings in each Member State must be able to compete with one another on equal competitive terms.It is accepted that restrictions may be imposed, especially those which may originate in the application of national rules justified by the general interest which are binding upon any person established in the State in which the service is provided (judgment in Case 33/74, Van Binsbergen, [1974] ERC 1299, paragraph 12). However, such rules must still be applied in accordance with the principle of proportionality: a measure must be “objectively justified” by the need to achieve the desired result (Joined Cases 110 and 111/78, Van WesemaeL [1979] ECR 35, paragraph 29).In the opinion of the respondents in the main proceedings, compliance with that principle implies thata) restrictions are required in order to achieve the objective of general interest;b) such restrictions are confined to measures having the least constraining effect upon the freedom to provide services;c) they are adequate to achieve that objective;d) they are not out of proportion to the end to be achieved.In view of the particular facts of this case the respondents in the main proceedings contend that the measures taken in implementation of the Royal Decree of 24 December 1966 are not objectively justified by the need to achieve the intended objective and blatantly contravene the principle of proportionality.The respondents in the main proceedings reply to the question whether national measures may be justified on the ground of public policy (Articles 56 and 66 of the Treaty) by referring to the judgment in Case 33/77, Bouchereau ([1977] ERC 1999 at p. 2015, paragraph (3) of the operative part), in which the Court ruled that: “In so far as it may justify certain restrictions on the free movement of persons subject to Community law, recourse by a national authority to the concept of public policy presupposes, in any event, the existence, in addition to the perturbation to the social order which any infringement of the law involves, of a genuine and sufficiently serious threat affecting one of the fundamental interests of society.”Those conditions are not fulfilled in this case.In conclusion, the respondents in the main proceedings propose that the Court should answer the first question as follows :“Article 59 prohibits any national rules or measures taken in implementation of national rules prohibiting the transmission of advertisements by cable distribution companies, where the broadcasting of such television commercials is already governed in the Member State of origin by rules based upon the same desire to protect the general interest and where the application of those rules in the Member State in which the service is provided affects only the persons providing and receiving the service, who are nationals or established in other Member States, while in other respects that restriction is not suited to achieving satisfactorily the intended objective of general interest”.Radio- Television Belge de la Communauté Française (hereinafter referred to as “RTBF”), an appellant civil party, first examines the service provided by a broadcasting organization.The service of broadcasting a television advertisement is provided when it is put out on the air. The service of broadcasting is completed once the advertisement has been transmitted; it is exhausted in the natural reception zone of the transmitter.The person who commissions the advertisement, in this case the advertiser, cannot ask the broadcasting station to do anything more than reach the people in the natural reception zone of its transmissions.In this respect, each provider of services is bounded by its own limitations depending on either the rules to which television broadcasts are subject or the technical means at its disposal.The service performed by a broadcasting station therefore consists in the assistance which it provides in sending an advertisement over the air to potential recipients.The service performed by a cable television distributor consists in receiving the broadcast and then transmitting it to television viewers. The cable television distributor aims at two categories of television viewers.First, it aims at television viewers who, being within the natural zone of the broadcasting station's transmitter, can receive broadcasts direct from the transmitter. In that case free movement of television broadcasts is extraneous to any intervention by the cable television distributor.Secondly, it aims at television viewers who are not within the natural zone of the broadcasting stations's transmitter and who cannot receive broadcasts direct from the broadcasting station. In this case, since the service provided by the broadcasting station is naturally exhausted, there can be no question of the free movement of the service provided by the broadcasting station. In this case therefore a new service is provided. The provision of that service is specific and identifiable, particularly because it involves remuneration paid by the television viewer to the cable television distributor.Consequently, it is not possible to link the broadcast to cable television distribution without distorting the problem; the real problem is solely to ascertain whether national rules on cable television distribution are such as to prevent freedom of movement in relation to the provision of another service, that specifically provided by the cable television distributor.The question is therefore whether a national authority may regulate the provision of a service which takes place in its own territory.It has never been disputed that rules governing the pursuit of a trade or profession applicable to those who are actually within the territory of a Member State are within the competence of the national authorities. The Van Binsbergen judgment (Case 33/74, [1974] ECR 1299) extended that principle to those whose activity is entirely or mainly directed towards the territory of that State although they are not established there. The only restriction is that the Member State should not exercise its competence in order to introduce particular requirements which are out of proportion to the aim pursued.For reasons concerned mainly with public policy the Belgian legislature has for a long time been opposed to both the broadcasting and the diffusion by cable television of advertisements. By so acting it is defending a specific form of communal life which represents one of the fundamental interests of society (Case 33/77, Bouchereau, [1977] ECR 1999).It is the service, defined by the Royal Decree of 24 December 1966, which the cable television distributor may lawfully provide. The service thereby defined is not impeded in any way. Nor does the applicable system of rules cause discrimination because it applies to cable television distributors, irrespective of their nationality, operating in Belgium.Nor is there any discrimination based upon the geographical location of the foreign broadcasting station. The doubt expressed in this case by the Tribunal Correctionnel is irrelevant since the freedom of movement which is in issue is not that of the broadcast material but that of the service provided by the cable television distributor. But even supposing that the question were relevant in this case, the reply must be quite categorical: the location of a broadcasting station is one particular element of competition which cannot be eliminated without thereby distorting competition between broadcasting stations; such competition is one of the fundamental aims of the Treaty (Articles 3 (f) and 85 of the Treaty). Indeed, as Community law now stands, geographical location is a factor which cannot be eliminated without adversely affecting the competitive capacity of undertakings which are ex hypothesį better situated.The comment in paragraph (b) of the first question is also irrelevant. First of all there is an error of law in relating the effectiveness of a rule of law to its lawfulness. There is also an error of fact. As regards people who are in the natural reception zone of the foreign broadcasting station, the aim of the rules is achieved in part if the cable television organization cannot receive and transmit advertising material by cable, since the television viewer must take the necessary steps himself. As regards those who are not in the natural reception zone, the aim is completely achieved.In conclusion, RTBF proposes that the Court should reply to the first question as follows:“Article 59 of the Treaty of Rome does not prohibit all rules against the transmission of advertisements by cable distribution companies where the natural reception of such advertisements in the reception zones of foreign broadcasting stations remains possible and lawful.”The Federation Nationale du Mouvement Coopératif Féminin, the Fédération Belge des Coopératives, Vie Féminine and Mrs Françoise Vander Bernden and Others first state that the situation in Belgium is different from that which led to the Sacchi judgment (Case 155/73, [1974] ECR 409). RTBF and BRT do not have the right to broadcast advertisements and cannot therefore claim to have the slightest monopoly in this field. The Royal Decree of 24 December 1966 was intended to ensure compliance by cable television distributors with the rule to which the broadcasting corporations are subject.Furthermore, the services performed by the Belgian broadcasting corporations are not provided in return for remuneration and cannot therefore be regarded as services within the meaning of Article 60 of the Treaty.In view of the Sacchi judgment and considering the situation in Belgium, it is futile to claim that the national rules against the transmission by cable television distribution companies of advertisements coming from broadcasting stations located outside national territory have a harmful effect upon the movement of goods when natural reception of those advertisements is still possible in the respective reception zones of such broadcasting stations.Article 21 of the Royal Decree of 24 December 1966 does not discriminate between persons providing the same service on the basis of domicile or nationality. Consequently it cannot contravene Articles 59 and 60 of the Treaty.Furthermore, Article 21 is part of a dual system which is the expression of a fundamental political choice taken by the Belgian legislature. The other side of the coin is the prohibition on the broadcasting of advertisements which Belgian broadcasters are bound to observe. Apart from the fact that it cannot be founded upon any discriminatory practice, the refusal to apply Article 21 to the accused on the pretext that they are retransmitting foreign broadcasts has the immediate effect of. creating discrimination on the basis of nationality or domicile, to the detriment of Belgian persons providing the service contemplated. The judgment in Case 39/75, Coenen ([1975] ECR 1547), applies the principle of proportionality in the matter of the provision of services and at the same time lays down the limits of that principle. The effect of that judgment is that if the Court considered that the broadcasting of television advertisements by a company established within the territory of a Member State and their retransmission by cable by another company, constituted under the law of another Member State, is one service, it should rule that that type of activity is akin to those upon which the Court placed restrictions in the Coenen judgment.In the opinion of the Government of the French Republic the authority of Case 155/73, Sacchi, (cited above) should be adhered to in the present case.It points out that the differences between the situations in which television broadcasting stations find themselves due to their geographical location cannot constitute discrimination within the meaning of Article 7 of the Treaty.On the other hand, a situation caused by the application of legal rules which modify the natural reception zones of broadcasts unequally as between broadcasting stations does represent discrimination.The French Government takes the view that it is better that the retransmission of broadcasts via a cable network should be a “passive” retransmission, in other words, having no effect upon the content of the broadcasts. Such retransmission may be either total or nonexistent but should not give rise to any interruption in or alteration to any programme which is retransmitted (including advertisements).For its part the French Government sets great store by the observance of such a principle at the national and European level, as being the only way to avoid, first, partial excisions involving an alteration to programmes hitherto freely broadcast or possibly leading to censorship itself, and, secondly, the risk of the practice already observed in other countries whereby unscrupulous distributors retransmit only part of the programmes and take advantage of their television audience to replace the parts left out with advertisements or other parts of programmes of their own, and, thirdly, leaving to technicians the task of making cuts which would sometimes be very difficult to decide upon and distinguish in programmes as a whole whose value would thus be diminished for listeners or television viewers, thereby causing an indirect but definite discrimination which is censured by the Treaty.The Luxembourg Government observes that because of the national rules in issue broadcasting organizations in other Member States are prevented from broadcasting their programmes by way of the cable television networks in Belgium to the extent to which those programmes contain commercial advertisements.Since the relevant Belgian provisions were introduced after the EEC Treaty came into effect they constitute “new restrictions” forbidden by Article 62 of the EEC Treaty. It is established case-law of the Court of Justice that such a “stand-still” clause has direct effect in the Member States and that it may be relied upon by individuals before national courts.However, even if the restriction upon the free movement of services rested upon provisions existing before the EEC Treaty came into force, individuals could rely upon Article 59 of the Treaty before national courts.Basically, Articles 59 and 62 of the Treaty contemplate only discrimination against foreigners. Since the prohibition on advertising affects national and foreign broadcasts alike, a literal interpretation rules out the application of Articles 59 and 62 of the Treaty here.The Luxembourg Government wonders, however, if it is not best to apply an interpretation more favourable to the integration of the Community by analogy with the case-law of the Court as to the words “quantitative restrictions and measures having equivalent effect” contained in Article 30 of the Treaty. According to the case-law of the Court all trading rules enacted by a Member State which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade constitute measures having an effect equivalent to quantitative restrictions. It is therefore irrelevant whether this is a case of material discrimination, still less of strict discrimination; all that matters is the effect which the rules have upon trade between Member States.However, such measures may be justified by virtue of Article 36 of the Treaty on specific grounds relating to the public interest.If that case-law is transposed to the free movement of services there does not seem to be any particular grounds relating to the public interest such as to justify the prohibition on advertising contained in Article 21 of the Belgian Royal Decree of 24 December 1966. The fact that the Belgian Government has not in practice secured observance of that prohibition but that it has even expressly tolerated and gone so far as to justify its nonobservance, demonstrates that the ban does not serve essential public interests.If this argument by analogy is not accepted there are perhaps still, despite the apparently equal treatment of Belgian nationals and those of other Member States, grounds for questioning whether there is not in reality a restriction upon the freedom to provide services, or discrimination.In this respect the Luxembourg Government refers to the judgment of the Court of 7 February 1979 (Case 136/78, Auer, [1979] ECR 437) which specifies that equal treatment with nationals is not sufficient in itself to guarantee freedom of establishment if all the other hindrances, apart from nonpossession of the nationality of the host country, are maintained.The cases in point here are those where the effects of the differing conditions required to be fulfilled prior to the exercise of an activity or the provision of a service in the various Member States amount to an obstacle to the free movement of persons.The Treaty prohibits not only overt discrimination but also all covert forms of discrimination which, by applying other differing criteria, have the same effect in practice (judgment in Case 152/73, Sotgiu, [1974] ECR 153; judgment in Case 61/77, Commission v Ireland, [1978] ECR 417).On the basis of that case-law one can say that although the letter of the prohibition on the diffusion of advertisements by cable television networks is directed at broadcasts by Belgian and foreign broadcasting organizations alike, in practice it only affects broadcasting stations in other Member States whose programmes contain advertising.The Luxembourg Government dwells upon the problems caused by the interruption of broadcasts by cable television distributors.In conclusion, it proposes that the Court should answer the questions referred by the national court as follows:“Any rules of a Member State which, although strictly applying to national and foreign organizations alike, directly or indirectly prevent, or appreciably impede, the transmission of radio and television broadcasts coming from other Member States, constitute discrimination under the first paragraph of Article 7 and a restriction upon the free movement of services under Articles 59 and 62 of the EEC Treaty, unless those rules are absolutely necessary for the protection of essential public interests in the State concerned and those interests cannot be protected by a measure which is less restrictive upon the free movement of services.”The Government of the Federal Republic of Germany believes that the answer to the first question should be in the negative. The Treaty does not prohibit Member States from resisting the broadcasting within the territory coming under their sovereignty of advertising material by television stations, by radio waves or cable, even when it is still possible to receive such advertising material broadcast by foreign stations in the territory in question.The question is whether the rules in issue do or do not in fact impede the free movement of services across frontiers, which is all that Article 59 guarantees.Freedom to provide services within the meaning of Article 59 et seq. presupposes, however, that some sort of legal or commercial relationship exists between the person providing a service and the person receiving it, or at least, where there is unilateral provision of a service, deliberate conduct on the part of the person providing the service. The fact that goods cross a frontier “fortuitously”, whether owing to circumstances of force majeure or to any other cause, does not constitute “trade”. The diffusion of television broadcasts can only be regarded as a service extending beyond the purely national level within the meaning of Article 59 et seq. if the broadcasts are in fact meant to reach viewers beyond the frontier. The German Government believes that if the crossing of a frontier by a broadcast is but the unavoidable, incidental effect of a broadcast directed at the national territory alone, then one cannot speak of the provision of services intended for “nationals of another Member State”, as Article 59 does.The television programmes in question are in fact meant to be picked up within the national frontiers; in the Federal Republic of Germany, in particular, they are directed so as to cover the national territory.Rules such as those in this case are to be regarded as a limitation, upheld by Community law, upon the freedom to provide services. Under Article 60 of the Treaty the provision of services which extend beyond the national boundaries of a country shall be provided “under the same conditions as are imposed by that State on its own nationals”. The fact that Articles 56 and 66 of the Treaty taken together leave Member States the power to maintain discriminatory restrictions to the detriment of those who provide services extending beyond national boundaries must be understood to mean that Member States are all the more justified in adopting general rules which are not discriminatory, as in this case.Next, national rules restricting the provision of services are not acceptable in Community law if they are not based on any convincing ground or if the burdens which they impose are out of proportion to the objective pursued. Those conditions do not however obtain in the case of restrictions imposed on television advertising. In the Federal Republic of Germany, as in other Member States, there are detailed rules governing the broadcasting of such advertising, specifying for example, the proportion of each working day which it may occupy.In particular, if radio and television are regarded in a Member State as being a public service and are consequently organized in a particular way, a corresponding general prohibition on advertising must not be capable of being challenged under Community law (Sacchi judgment, cited above).The objective pursued by Belgian legislation is largely achieved by the existing rules The fact that a legal measure, which is in principle justified on grounds of a superior public interest, does not fully achieve its objective, is not on any view injurious if that objective cannot be fully achieved without unreasonable accompanying measuresFurthermore, the rules in question are justified by Articles 56 and 55 taken together with Article 66 of the Treaty.In conclusion, the German Government proposes that the first question should be answered in the negative.The Commission begins by determining the services likely to be affected by the disputed rules.Whilst there is no doubt that the broadcasting of television programmes constitutes the provision of a service under Article 59 et seq. of the Treaty (Sacchi judgment, cited above), it is necessary to ascertain whether the conditions for the application of those articles, especially of the first paragraph of Article 60, are fulfilled; those conditions relate to the transnational and non-gratuitous nature of the serviceThere is no need to examine whether a service is provided between the foreign broadcasting station and the Belgian cable television distributors in the absence of payment of remuneration by the latter to the former. It is in fact sufficient to establish that in the case of a television broadcast in the nature of an advertisement, there is always at least a “classic” provision of services between the television broadcasting station (the provider of the service) and the advertiser (the recipient) in return for paymentThere is sufficient proof of the transnational nature of that service since it is well-known that television broadcasting stations in countries neighbouring Belgium broadcast advertisements commissioned by advertisers established in countries other than that of the broadcasting stationThere can be no doubt that the disputed Belgian rules form an obstacle to the provision of services thus defined. The service which the broadcasting undertaking (public or private) may offer advertisers and the remuneration which it may secure in return quite clearly vary with the extent of the territory which a broadcast may reach. Thus, in the situation at issue here, a Belgian advertiser, for example, would be much less interested in a broadcast publicising his products if it reached only a small part of Belgian territory (natural reception zones) than if it reached the whole of that territory with the help of cable television. And the broadcasting station, the provider of the service, could therefore only obtain a considerably lower price. The offer of services would therefore be seriously affected, leading to the conclusion that there was a restriction upon the broadcaster's activity as a provider of a service falling under Article 59 of the EEC Treaty.Can the fact that the disputed rules are applicable “without distinction” justify their application to the provision of services of the type in question? Those services are in fact entirely performed outside the territory where the rules apply; they may even be said to be legal relationships between parties none of whom is established in the country, and their residual effect upon that territory is not the result of any direct action by the provider or recipient of the services, but is rather a purely physical phenomenon which they are quite happy to exploit. The answer to this question is fundamental to the determination of the scope of application of Article 59, on the one hand, and of the third paragraph of Article 60, on the other.There are many situations in which the provider of a service performs the service entirely in his country.Consequently, the question which the Court should answer is whether national rules which prohibit the broadcasting of television advertisements may not only be applied to any television company which broadcasts from the territory of the country in question, but may also extend beyond the frontiers so as to impede the formation of contracts for services which are perfectly legal for a provider of services established abroad, and only because the effect of that service can be felt in the territory of the country which introduced those national rules. The problem is to decide whether, in a common market, each Member State must or must not “recognize” the laws of the others, provided that reasons concerned with public international law do not lead to the application of that foreign law being excluded.Here, the prohibition on television advertising is not based upon a principle so fundamental to Belgian society that it must inevitably take precedence. The attitude of the Belgian governmental authorities speaks for itself in this respect.The Court has already made it clear that discrimination is not the only type of restriction prohibited by the Treaty (judgment in Case 33/74, Van Binsbergen, [1974] ECR 1299, paragraph 10). In its case-law it has evolved a principle which is not written into the Treaty, recognizing that each Member State has the right, without violating Article 59, to impose “specific requirements” upon the person providing a service established in another Member State which are justified by the general interest and are indentical or comparable to those imposed upon any person established within the territory of the State where the service is provided (Van Binsbergen judgment, cited above, paragraph 12; Case 39/75, Coenen, [1975] ECR 1547; Joined Cases 110 and 111/78, Van Wesemael and Fallacchio, [1979] ECR 35). The objective of that principle is to reconcile the freedom to provide services with the protection of recipients thereof and to ensure that the rules on the exercise of the activity in question are observed.However, the Commission points out that those judgments concern situations in which the person providing the service moved into the country where the service was performed, or, at all events, the service was performed in the country of the recipient, and those judgments were delivered purely in the light of those facts. One cannot therefore deduce therefrom an absolutely general rule which applied even in the absence of any activity carried on by a provider of services in the Member States which has rules on the exercise of the activity in question.Case 15/78, Koestler, ([1979] ECR 1971) has not altered that principle.The Commission therefore thinks that the application of the disputed laws to services (as between broadcasters and advertisers) performed entirely outside the territory of the State which has adopted those laws and which only impinge upon that territory as a result of the natural laws of physics, is contrary to Article 59 of the EEC Treaty.In the opinion of the Commission, the reservation regarding public policy in its strict sense and that regarding public security (Article 56 of the Treaty) may be disregarded because those problems do not arise in this case.Supposing, however, that the disputed rules are in principle applicable, their aim of preventing the diffusion by television of commercial advertisements in Belgium cannot be achieved. Therefore the constraints placed upon the provision of services by television broadcasting stations in adjacent countries are not justified as being the most suitable way of achieving that objective.Nor is there discrimination between broadcasting stations in the various adjacent countries on the ground that, because of their respective geographical locations, they cover natural reception zones of greatly varying interest from the advertising point of view.Assuming that the disputed prohibition is lawful, the fact that it constrains some more than others is attributable not to any conscious intention of the authors of the rule but to natural geographical factors over which they have no influence. It is therefore impossible to ensure that their economic effects are equal for everyone. The Treaty does not prohibit natural inequalities but it does prohibit the deliberate treatment of some differently from others.In conclusion, the Commission proposes that the first question should be answered as follows:1. Article 59 prohibits national rules against the transmission by cable television distributors of advertisements broadcast by an undertaking operating a television station established outside the national frontiers, which are broadcast from that station by way of a service to advertisers established in a Member State other than that where it carries on its activity, subject only to the requirements of public policy and public security, as provided by Article 56.2. There is a fortiori such a prohibition if the rules in question cannot prevent reception within the country of the same advertisements — without the intervention of cable television distributors — by an appreciable number of the television viewers, since the rules thereby impede the provision of the services in question without achieving the intended objective.3. In the alternative, there is no prohibited discrimination by reason of the fact that foreign broadcasting stations enjoy natural reception zones in the State which has introduced the rules which are of different economic interest depending on their location.”
Source: EUR-Lex, © European Union, 1998-2026. Reuse authorised under Decision 2011/833/EU.